What Obama Can Learn from European Health Care

Imagine a place where doctors still do house calls. When I was visiting my friend Meredith, living in the small rural town of Lautrec about an hour’s drive outside Toulouse, France, one day she was stung badly by a wasp, causing a sizable and painful swelling on her hand.

She called her doctor, and to my great surprise within 15 minutes he had shown up at her door — the famous French doctor’s house call. I couldn’t get over it. “House calls in the United States went out when Eisenhower was president,” I told her, shaking my head.

My father-in-law had a similar experience while vacationing in Switzerland. He awoke one morning with what turned out to be a painful urinary tract blockage. The doctor paid a house call with hardly any wait at all and inserted a cleverly designed catheter that had no drainage bag.

Even though he was a foreigner, my father-in-law paid out-of-pocket only $100 for this emergency service. Back at home in Minneapolis when he had to go to the emergency room a couple of years later, he waited nearly nine hours to receive medical attention, even though he had health insurance.

A U.S. expatriate living in Belgium told me that both he and his sister in Minneapolis had a procedure called a catheter ablation of the heart to eliminate an irregular heartbeat. Even though she had full medical coverage provided by her employer, she spent $2,400 out-of-pocket for the procedure which was performed as an outpatient surgery under a mild sedative.

For the same procedure in Belgium, he paid just under $100 and received full royal treatment, including two nights in the hospital for observation and post-op recovery.

The medicine he now needs to take costs him about $4 for a three-week supply. In the United States that same medicine costs his sister $19 – nearly five times the price in Belgium.

Even the moderately poor and formerly communist countries in East and Central Europe have universal health care. In the Czech Republic, when thegovernment wanted to introduce a co-payment of less than $2 per office visit, it nearly toppled the government because health care is viewed as a basic right and an integral part of the nation’s social contract.

What is truly disturbing, given the vast outlays for health care in the United States, are the various health indicators showing the country’s poor performance.

Whether one looks at infant mortality, life expectancy, the number of physicians, hospital beds, medical errors or high out-of-pocket expenses, America underperforms to a shocking degree. Consequently, the World Health Organization (WHO) has ranked the United States 72nd of 191 countries for “level of health.”

And it ranks 37th for “overall health system performance” — just behind Costa Rica and Dominica and just ahead of Slovenia and Cuba, countries with a fraction of the economic wealth of the United States.

France and Italy, which have universal health care coverage for all their residents, even recent immigrants, were ranked first and second in the WHO listing. Most other European nations, who also have universal coverage for all, also were ranked near the top.

Yet despite this difference in performance between U.S. and European systems, somehow Europe manages to spend only a fraction of what the United States spends on health care.

According to the WHO, the United States spends 16.5% of its GDP on health care, or about $6,100 per person. This compares to an average of 8.6% in European countries. France does it for far less, spending just $3,500 per person, or 10.7% of its economy.

Says Dr. Christopher Murray, director of the WHO’s Global Program on Evidence for Health Policy, “Basically, you die earlier and spend more time disabled if you’re an American — rather than a citizen of most other advanced countries.” That’s a highly unsatisfactory state of affairs for the world’s lone superpower.

How do the French, Italians and other European countries do it? How do they manage to provide better health care than most Americans receive for about half the per capita cost? While there are differences from nation to nation, there also are some broad generalities to point to, as well as national specifics.

These give us a pretty good snapshot that should be instructive to the Obama Administration as it grapples with the inefficiencies that are continuing to hurt American workers, businesses — and increasingly will hurt U.S. competitiveness in the global economy.

The first overriding difference between U.S. and European healthcare systems is one of philosophy. The various European healthcare systems put people and their health before profits — la santé d’abord, “health comes first,” as the French are fond of saying.

It is the difference between health care run mostly as a non-profit venture with the goal of keeping people healthy and productive — or running it as a for-profit commercial enterprise. It’s no coincidence that, as the United States tries to grapple with soaring healthcare costs and lack of universal coverage, UnitedHealth Group CEO William McGuire received a staggering $124.8 million in compensation in 2005. He is just one of many grossly overcompensated kingpins of the U.S. healthcare industry.

U.S. healthcare corporations will spout platitudes about wanting to provide good service for their customers, but there’s no escaping the bottom line that the CEOs of giant health corporations ultimately are accountable to one small group — their stockholders.

If nothing else, the U.S. healthcare system provides a valuable fable illustrating that corporate profits and affordable, quality universal health care are not a viable mix.

The second major difference between U.S. and European health care is in the specific institutions and practices that flow from this philosophy of “health comes first.” Contrary to stereotype, not every country in Europe employs government-run, “socialized medicine.”

Unlike single-payer Britain or Sweden, other nations like France, Germany, Switzerland and Belgium have figured out a third way, a hybrid with private insurance companies, short waiting lists for treatment and individual choice of doctors (most of whom are in private practice). This third-way hybrid is based on the principle of “shared responsibility” between workers, employers and the government, all contributing their fair share to guarantee universal coverage.

Participation for individuals is mandatory, not optional, just as it is mandatory to have a driver’s license to drive a car.

These healthcare plans are similar to what Massachusetts recently enacted — but with two essential differences.

First, in France and Germany, the private insurance companies are non-profits. Doctors, nurses and healthcare professionals are paid well, but you don’t have corporate healthcare CEOs making hundreds of millions of dollars. Generally speaking, the profit motive has been wrung out of the system.

The second key difference is in the area of cost controls. In France and Germany, fees for services are negotiated between representatives of the healthcare professions, the government, patient consumer representatives and the private non-profit insurance companies.

Like in the U.S. system for Medicare, together they establish a national agreement for treatment procedures, fee structures and rate ceilings that prevent healthcare costs from spiraling out of control. And this is good for businesses because it doesn’t expose them to the soaring healthcare costs that have plagued U.S. businesses and created bitter labor strife between business owners and their employees.

So if the United States’ privatized system is at a dead end, which would be better to adopt in the United States, either the single-payer type of Britain, Sweden and Canada — or the shared responsibility system of France, Belgium, Germany and Japan?

Either would be vastly better for most Americans than what the country currently has.

But in talking to different people in Europe in many countries, including doctors, nurses and consumers, I came to the tentative conclusion that the shared responsibility systems seem to offer a few advantages over single payer, including shorter waiting periods for surgery and other procedures.

Generally speaking, their healthcare systems had a better reputation among the people who used them, I found. In fact, it is not uncommon for those who live in single-payer countries like Britain to travel to the shared responsibility countries like France or Belgium.

That way, they avail themselves of certain healthcare services and surgeries because the lines are shorter and the care just as good if not better (individuals from EU member nations have reciprocity to use each other’s medical services).

This trend seems noteworthy and worth further investigation. Instead of relying on the assumption that universal health care is synonymous with single payer, U.S. proponents of quality, affordable health care should examine the shared responsibility systems of France, Belgium, Germany and elsewhere.

President Barack Obama, to his credit, is doing what he can in difficult times to extend healthcare coverage to some of the 47 million Americans currently lacking it. Recently he signed legislation, previously vetoed by President Bush, to expand the State Children’s Health Insurance Program (SCHIP), which will provide subsidized health care to up to four million mostly low-income children.

And his fiscal stimulus package included $25 billion for subsidizing 65% of healthcare premium costs for laid-off workers for up to nine months. Yet for many of the unemployed, even that subsidy will not be sufficient to allow them to afford healthcare coverage, an increasing concern as the ranks of the unemployed rise. And none of these measures do anything to bring down the cost of health care, which slowly is crippling the U.S. economy.

Americans love to be number one and win the gold, whether in Olympic skiing, the World Series, Super Bowl or the Tour de France. But I am still waiting for the day when Americans decide they want to be number one in health care. Wouldn’t it be grand to beat the French for a change at something that really matters.

A provocative, remedy-based perspective on the joint complexities of economic stability and ever expanding technology.–Kirkus Reviews

“Hill hits Silicon Valley darlings like Uber and Airbnb alongside the former online black market Silk Road, right-to-work laws, and factory robots all under the umbrella of “naked capitalism.” He explains how the rise of the “1099 workforce” is not limited to Silicon Valley; more and more traditional jobs in fields like manufacturing are turning to contractors to perform the same tasks full-time employees used to do. In addition to costing workers in benefits and safety nets, misclassifying workers as contractors costs federal and state governments billions of dollars annually in lost tax revenue.” ―Washington Monthly

“For anyone driven crazy by the faux warm and fuzzy PR of the so-called sharing economy Steven Hill’s Raw Deal: How the “Uber Economy” and Runaway Capitalism Are Screwing American Workers should be required reading… Hill is an extremely well-informed skeptic who presents a satisfyingly blistering critique of high tech’s disingenuous equating of sharing with profiteering…Hill includes two chapters listing potential solutions for the crises facing U.S. workers…Hill stresses the need for movement organizing to create a safety net strong enough to save the millions of workers currently being shafted in venture capital’s brave new world.” ―Counterpunch

“A growing underclass scrambling to make ends meet at the whim of increasingly picky and erratic employers, that number could balloon to 65 million within 10 years, or about half of the domestic workforce, warns Steven Hill in his troubling new book, Raw Deal. This brand of worker abuse cuts across industries and company size. Hill calls out Uber, AirBnb, Merck, Nissan, and dozens of others. Hill does a nice job of putting it in starker, easier-to-understand ways.” ―Washington Independent Review of Books

“Steven Hill’s book Raw Deal is a red-faced, steam-out-the-ears indictment of sharing apps. Yet Hill offers a pragmatic, almost post-ideological solution: “individual security accounts” for workers. Companies that use independent contractors, or offer scant benefits for employees, would have to add on a certain percentage of their pay as a contribution to those accounts, which would cover health care, unemployment insurance, and more. There’d be a mechanism ― and a requirement ― for companies to contribute to the long-term well-being even of workers who aren’t on their traditional payrolls.” ―Boston Globe

“Raw Deal is a book for its time. Steven Hill perfectly captures the anxiety of the American worker in today’s increasingly digital economy. Hill presents some compelling ideas, the most important being something he calls the Economic Singularity. In this unfortunate tipping point, the concentration of wealth in the hands of the few results in economic implosion because the 99 percent can’t afford to buy anything the 1 percent has to sell. The United States is turning into a nation of 1099 workers who eke out a living driving cars, renting rooms and running errands for people who apparently have better things to do with their time. Throw in self-thinking computers and obedient robots, and there won’t be any work left for plain old Homo sapiens…Hill proposes that we offer 1099 workers a new safety net consisting of tax deductions, individual security accounts and multiemployer health care plans. All good ideas.” ― San Francisco Chronicle

This book is a must read for those concerned about how technology is disrupting the way we work and eroding the social safety net, and how policy makers should respond to ensure that the growing number of workers in the “gig” economy earn adequate benefits.—Laura D’Andrea Tyson, UC-Berkeley and former Chair of the US President’s Council of Economic Advisers

“Steven Hill’s groundbreaking book on the part-time, unstable ‘Uber Economy’ shows how a new sub-economy becomes a work of law-flouting regress undermining full-time work. Remote corporate algorithms run riot!”— Ralph Nader, consumer advocate

For many years, Steven Hill’s analysis, commentary and activism have helped shape our understanding of the U.S. political economy. His latest book, Raw Deal is A riveting expose that shows with alarming lucidity what Americans stand to lose if we don’t figure out how to rein in the technological giants that are threatening the American Dream.–Katrina vanden Heuvel, editor and publisher of The Nation

In Raw Deal, Steven Hill documents in frightening detail the ways in which new forms of work promise to plunge US workers and their families into further economic hardship, risk-assumption, and instability. Fortunately, Hill does not simply anticipate catastrophe; he closes the book with an informed call for institutional reforms that would lessen the negative consequences of these potentially dangerous forms of work. Anyone concerned with US working conditions – whether American workers, worker advocates, labor market scholars, or policy-makers – must read this book .— Janet C. Gornick, Professor of Political Science and Sociology, Graduate Center, City University of New York, Director, LIS: Cross-National Data Center in Luxembourg

Praise for Expand Social Security Now

“Read this book before you vote. Few issues are more important to your personal economic future. Steven Hill shows what’s at stake, and he offers solutions that Americans of all stripes can agree on.”—Robert B. Reich, author of “Saving Capitalism: For the Many, Not the Few”

“Steven Hill has written a barn burner of a book. Or perhaps I should say ‘myth buster,’ because he systematically demolishes the false justifications for slashing Social Security. In place of misplaced animus and misleading arguments, he offers a strong case for dramatically expanding America’s most successful domestic program in an age of rising inequality and widespread financial insecurity.”—Jacob S. Hacker, coauthor of “American Amnesia: How the War on Government Led Us to Forget What Made America Prosper”, Professor, Yale University

“Steven Hill has written a vigorous defense of Social Security, the country’s most important social program. While most political debate in recent years has focused on ways to cut Social Security or privatize it, Hill goes in the opposite direction and argues for a robust expansion. Hill proposes a Social Security program that would be adequate by itself to support a middle-class retirement.”—Dean Baker, co-founder of the Center for Economic and Policy Research, and author of “Getting Back to Full Employment: A Better Bargain for Working People”

“Steven Hill has produced a dynamite handbook for angry Americans who seek to take back democracy. The true contest is not Republicans versus Democrats. It is the American people versus Washington. And this is the sleeper issue the people can win. The governing elites in both parties are trying to eviscerate Social Security—arguably the most successful and most popular program created by the federal government. Hill explains why the political insiders and their Wall Street patrons are wrong about Social Security. He shows us how to mobilize to defeat the power elites and expand Social Security rather than destroy it.”—William Greider, author of “Come Home, America: The Rise and Fall (and Redeeming Promise) of Our Country”

Praise for Europe’s Promise

Financial Times: “Steven Hill is a lucid and engaging writer. He makes you sit up and think.”

The Economist: “In a new book, Steven Hill extols the European social contract for better government services. Life in Europe is more secure, he argues, and therefore more agreeable.”

Hendrik Hertzberg, The New Yorker: “Like a reverse Alexis de Tocqueville, Steven Hill dauntlessly explores a society largely unknown to his compatriots back home.”

Andrew Moravcsik, Foreign Affairs: “Europe’s Promise is a timely and provocative book . . . the “social capitalist” policies of European countries represent best practices in handling most of the challenges modern democracies face today.”